Why Paying Cash Can Save Money
The Short Answer: Cash is king because it lowers the cost of providing care.
- The doctor doesn’t have to deal with insurance billing, delayed payment or collections. That’s about 25-30% of their overhead.
- Our independent providers don’t charge “facility fees” which are allowed by insurers to compensate hospitals for costs associated with operating a hospital.
- Our providers are competing for patients against Billion Dollar plus Health conglomerates.
- uMedMarket pays providers in advance! They like that.
If you have ever tried dealing with an insurance company, you know it can be very difficult. It is hard to describe the problem correctly, that makes it hard to talk to the correct person, who may struggle to fix the problem correctly and in a timely fashion. It’s stressful, difficult and time consuming because insurance is so complicated. It is even more complex for doctors and providers. Some providers have employees whose only job is dealing with insurance. According to an ACP estimate, a doctor spends between $68K and $85K per year on billing and insurance company issues. A hefty percentage of insurance paperwork has errors (most of which are not typos, but from unclear and complex forms) and takes months to fix. This means payment to the doctor can be months behind the actual appointment and the (some) doctor spends a quarter of their revenue trying to get the other three quarters.
When you pay cash (paper, credit card, debit card, etc.) the doctor gets paid (essentially) immediately. They don’t have to deal with filing paperwork and getting the right codes and figuring out which paperwork is the correct paperwork. They just get paid and are done. They save all the time and effort from dealing with insurance and can charge less. Providers in the uMedMarket Network charge less for cash payments than for insurance payments. Most high deductible health plans have pre-negotiated ‘In-Network’ prices. These ‘In-Network’ prices are often higher than the true cash price because the doctor still has to deal with insurance. But, generally providers are contractually obligated to charge the higher insurance pre-negotiated cash price if the patient uses their insurance. If you don’t use your insurance and pay cash, you will generally get a lower price and often less than the co-pay or co-insurance! Be aware that the insurer may not count your cash expenses toward your deductible because they are ‘Out-of-Network’ and you didn’t pay the ‘In-Network’ price. Crazy, I know! You can appeal these cash expenses to be counted toward your deductible if you actually reach your deductible but if you never reach your deductible it doesn’t matter.
Facility Fees were introduced with the Accountable Care Act as part of a Federal Government strategy to bring more of the US healthcare system under regulation. This strategy incentivizes hospitals to provide outpatient services by paying an additional fee (the Facility Fee) that ranges from ~15-30% of the service fee. Since hospitals have to follow the ACA rules, this brings outpatient services under the regulation of the ACA. Independent providers don’t get a facility fee, so are at an economic disadvantage, and this is why so many physicians have left independent practice to become employee of hospitals.
If you have any questions, shoot us a note and let us know! Support@uMedMarket.com